Wal-Mart: The Transformative Power of a Transformed Company

Here’s an interesting story about Wal-Mart’s decision, back in 2005, to ‘go green.’
From the NY Times: Green-Light Specials, Now at Wal-Mart.

Two grand themes emerge in the story. Both are about massive transformations.

One is the story of Wal-Mart’s attempt to use its enormous size, and its enormous influence over its supply-chain, to do what very few companies can do: have a significant (positive) impact on the environment.

By virtue of its herculean size, Wal-Mart eventually dragged much of corporate America along with it, leading mighty suppliers like General Electric and Procter & Gamble to transform their own business practices.

Under Mr. [Lee] Scott, who is retiring this month at the age of 59, the company that democratized consumption in the United States — enabling working-class families to buy former luxuries like inexpensive flat-screen televisions, down comforters and porterhouse steaks — has begun to democratize environmental sustainability.
For decades, many consumers felt that going green was a luxury, too, reserved primarily for those with enough money — and time on their hands — to buy groceries at natural food stores and organic clothing from specialty retailers.

(For previous postings on Wal-Mart and the environment, see here and here.)

The second grand theme of the story is the transformation of Wal-Mart into the kind of company that, by all appearances, wants to have the kind of positive impact alluded to above.

“It wasn’t a matter of telling our story better,” said Mr. Scott said in recent interview. “We had to create a better story.”

WAL-MART, of course, didn’t change overnight. It was pushed — or, more accurately, shoved — into wrenching reforms.

When Mr. Scott became chief executive in 2000, the company was a Wall Street darling. With nearly 4,000 stores and more than a million employees, it had edged out Goliaths like Sears and Kmart. But its size and success invited scrutiny. In 2005, two union-backed groups, Wal-Mart Watch and Wake Up Wal-Mart, set up shop in Washington and started a public relations assault against the company.

Some of you may have noticed that I implied above that having a positive impact was something that Wal-Mart (rather than, say, Mr. Scott, or the Board) “wanted.” Some people are skeptical about corporations (or other composite entities) “wanting” or “believing” or having other such mental states. But if you don’t take it too literally, you see it makes sense. As of 2009, Wal-Mart, as a whole, wants to play a certain kind of role. Now the reasons for Wal-Mart wanting that are pretty complex. In fact, I think at the level of reasons, that’s where we should say “No, corporations don’t have those.” If you want the reasons why Wal-Mart wants what it wants, you have to look at the many and diverse reasons why the different people that make up Wal-Mart want the company to play that role.

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